A Bigger Crisis Is On The Horizon, And It Will Last For Decades

as most of the news talks about enforcing mandatory lock downs and handing out money to citizens there has been a problem that has been rapidly expanding in the background of all of this news and it is a problem that the world has never really seen before in fact it might create a

crisis

that won't just be felt in the next week the next month or even the next year but it might be felt for several

decades

to come during World War two Britain was in the thick of war against the Axis powers

however Britain ran into a roadblock they were quickly running out of money so they began looking to borrow money from both their own future taxpayers as well as the United States and Canada in 1941 Britain began accepting loans and taking on debt to fund the war and by 1945 Britain had taken on nearly ten billion dollars worth of debt from its creditors at this point in time Britain's debt to GDP ratio was a whopping 200 percent meaning that the country had twice as much debt as its entire

market value of all of its goods and services it produces over an entire year and just some perspective for you is that the World Bank states that once a country reaches above 77 percent debt to GDP ratio its economy

will

begin to slow down from such a large portion of its revenue going towards paying down its own debt so after the war ended Burton had amassed a debt that was so large that they couldn't pay it back in one year five years ten years or even 20 years you see on December 29th

2006 Britain made its

last

payment on its World War two debt to the United States and Canada this means that British taxpayers from 1945 up until 2006 had a small portion of their tax bill every single year go towards the debt that the country accumulated in the 1940s and for about a decade after World War two Britain's economy was drastically hindered in part due to their outstanding debt that they incurred however their economy eventually recovered thanks to an influx of tax payers called

the baby boomers as well as some economic reforms and in for structure investments but you see Britney was a little bit lucky most of the time when a country accrues as much debt as Britain did during World War two they are not so lucky in 2001 Argentina's debt to GDP ratio reached a high of a hundred and sixty six percent which caused the country to default on over 100 billion dollars worth of debt this default made capital move out of the country and soon the nation saw millions of people

enter poverty while unemployment reached a high of 19 percent and to this day Argentina still hasn't fully recovered from its debt

crisis

that it went through nearly 20 years ago in similar stories can be heard around the globe there was Greece in 2012 Zimbabwe in 2006 Venezuela in 2017 and Russia in 1998 the point I'm trying to make here is that even though debt can be a good thing to take on in order to solve today's serious problems it

will

almost always have serious long-term

consequences that could

last

for years or even

decades

so now let's bring this back to the United States whether you know it or not America essentially runs on debt historically America's economy has been so big and has grown so fast that taking out tens of billions of dollars here or there hasn't really been much of a big deal because it was such a small percentage of the country's overall economy for example in 2006 the United States had a relatively healthy debt to GDP ratio

of about 60 percent but then the financial

crisis

hit and during the financial

crisis

the United States began scrambling for ways to pump money into the economy so it began taking at hundreds of billions of dollars in eventually trillions of dollars worth of debt and some people might think that the United States along with every other country that took out debt to get through the financial

crisis

has paid off some of the debt that they accrued in 2008 and 2009 but actually the opposite is true

you see since the financial

crisis

many developed countries throughout the world have been accruing more and more debt every single year while economic growth has slowed this means that many countries may find it actually more difficult to pay off their debt today than they did during the financial

crisis

and here's what I mean the United States debt to GDP ratio before the lock downs and this pandemic was around a hundred and six percent Canada's was around eighty eight percent

Italy's was a hundred and thirty three percent Singapore's was at a hundred nine percent and Japan's was at an astounding 237 percent what I'm trying to say here is that before this

crisis

even hit the governments around the world were in more debt than they had ever been in and then of course the lockdowns happened and everything began accelerating have you ever wondered how all of these checks that citizens are getting today are being paid for it's not from the governments

bank account because most governments don't have a lot of money right now and have little to no tax revenue coming in for the foreseeable future all of this is coming from debt so yes all of the aid packages and stimulus packages that every country in the world is giving out is essentially a form of debt that its taxpaying citizens

will

have to pay over the next several

decades

in fact if you live in the United States right now roughly one out of every ten tax dollars that you send to the

federal government goes directly towards the interest payment on the national debt and not towards any government programs and after this

crisis

passes that number

will

only get higher so this brings up a scary scenario many countries like the United States

will

accrue so much debt during these few months that they

will

be unable to pay for some of their government funded programs in the future so things like Social Security which is already running low on funds education military health care

one or all of those things might be seeing major cuts in the future in order to pay for the stimulus packages today and if a government wants to keep all of these social programs at their current level without accumulating more debt in the near future it

will

have to do something that isn't popular with its citizens which is raise taxes now I would just like to mention that it is highly unlikely that developed countries like the United States Canada or the UK

will

default on its loans which

would send the countries into an even deeper depression but it is quite that the debt that's being accumulated today

will

end up slowing future economic growth raising future taxes and reducing future funding for social programs and this effect might radiate for

decades

to come meaning that kids born today in 2020

will

likely be paying for a decent portion of the stimulus packages when they become adults and the government debt is not the only debt problem that we have in the world right now

see before the

crisis

ever began households were already racking up a record levels of debt to in 2020 households in the United States had roughly 14 trillion dollars worth of debt which is the highest debt level in history and the largest increase in household debt from 2008 to 2020 has come from of course student loans in 2008 student loans accounted for roughly 611 a billion dollars worth of household debt meanwhile today it is roughly 1.6 trillion dollars worth of household debt and when you

throw this all together you

will

see that the average household has roughly $100,000 worth of debt meanwhile these same households have on average only $8,000 worth of savings and for people under the age of 30 it's even worse as they have on average just two thousand seven hundred dollars worth of savings that is just enough to cover one month of housing food and insurance for the average person so what this all means is that going into this

crisis

the average person was already living

paycheck to paycheck with little to no savings and tons of debt and this was especially true for younger people it also means that the 1200 dollar stimulus checks might be able to help some Americans get by for an extra week or two but it won't be good enough for a long-term solution the only way to help people avoid missing rent payments defaulting on their loans or being delinquent on their mortgages is to lift at the lockdowns across the world but that might not happen for a while and I

can't help but think that as more and more households become unemployed that both individual and national debt

will

begin to pile up in order to stay afloat and this

will

happen at record levels that we have never seen before and that being said we have already surpassed the 2008 financial

crisis

in terms of employment levels and it looks like we might be heading for an economic dip that we have not seen since the Great Depression and depending on what other policies are enacted in the near

future we as taxpayers

will

likely be paying off as one two three month period of time for the next several

decades

to come but this problem might be a lot worse in the short term for developing countries in fact the IMF and World Bank have called for an immediate suspension of debt payments for the world's developing countries as many are very close to defaulting on their debt this could create an unprecedented debt

crisis

in the near future that would likely radiate throughout the entire

world now I would just like to mention that central banks are playing a major role in this debt

crisis

right now and are printing money hand-over-fist which is causing a ton of things like inflation and currency devaluation but it also might help pay down the debt in the future through something called quantitative easing but that could be a whole video in itself so who knows this might be the worst debt

crisis

the world has ever seen but maybe not only time

will

tell what do you think about the

debt

crisis

let me know in the comments down below also please click that like button because algorithms and it helps me out a ton you can also hit the subscribe button too if you do want to see more of my videos and please check out my documentaries playlist to see more videos like this so make sure to click on that playlist and I

will

see you guys in a few seconds you